consistency concept
Q: In virtually all circumstances, a fair presentation is achieved by compliance with applicable IFRSS.…
A: The question is related to Presentation of Financial Statements. IAS 1.
Q: The Framework issued by the IASB suggests that to show a true and fair view the information in…
A: International Accounting standard Boards (IASB) The purpose of forming the International Accounting…
Q: For each of the following situations, describe how the auditors’ report on internal control over…
A: a.
Q: Changes in accounting policy are Permitted if the change will result in a more reliable and more…
A: Change in accounting policy refers to change in the method of accounting principles or rules…
Q: Which is not a purpose of the IASB’s Conceptual Framework? -To assist auditors in forming an…
A: Which is not a purpose of the IASB’s Conceptual Framework::::: To assist preparers to develop…
Q: an entity that operates under a hyperinflationary economy is required to present information on the…
A: When a company operates in hyperinflationary economy or currency , then they have to make suitable…
Q: When it is difficult to distinguish between a change of estimate and a change in accounting policy,…
A: Answer : (a) Treat the entire change as a change in estimate with appropriate disclosure.
Q: All of the following are causes for the addition of an explanatory paragraph except for: Select one:…
A: Audit report contains the details about the findings of the auditor in the process of audit and…
Q: 27. If the auditors disagree with management regarding an accounting principle used in the…
A: Audit is the process of checking and verifying the authenticity of financial statements and…
Q: which of the following in not related to standards of reporting Select one: a. The report shall…
A: Report is a statement that is prepared by the auditor of the financial information. It includes the…
Q: The accounting and auditing literature discusses several different types of accounting changes. For…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Simplified approaches for preparing pro forma statements assume that the firm’s past financial…
A: External auditors are businesses or people that are professionally trained and engaged in the job to…
Q: Which of the following arguments is not in favour of entities being required to comply with…
A: Accounting Standards are standard set of rules or practices which must be followed at the time of…
Q: Which of the following may not be included in a typical audit program for auditing Retained…
A:
Q: he following is a list of qualitative characteristics of useful accounting information identified in…
A: SOLUTION- AN INDEPENDENT BODY OR ORGANIZATION WHICH IS INVOLVED IN PREPARATION OF FINANCIAL…
Q: When a client’s financial statements contain a material departure from an FASB Statementon…
A: Financial statements: Financial statements are condensed summary of transactions communicated in the…
Q: The accounting cycle differs depending on whether a company uses IFRS or ASPE accounting standards.…
A: The International financial reporting standards(IFRS) and Accounting standards for Private…
Q: 16. What is the purpose of information presented in notes to financial statements? a. To present…
A: Disclaimer:- Since you asked multiple question in one question, we will provide you the answer of…
Q: The area of the accounting profession that deals with providing information to meet the needs of the…
A: Introduction:- Basic definitions as follows under:- i) Financial accounting provides information to…
Q: Which type of audit report specifies that financial statements do not present fairly the financial…
A: The audit is required to be conducted so as to examine the accuracy of the books of accounts,…
Q: e ‘true and fair view’ concept is one of two competing but not mutually exclusive legal or…
A: True and fair view in auditing means the financial statements are free from material misstatements…
Q: Maines and Wahlen94 state in their research paper on the reliability of accounting information:…
A: Given: The reliability of the accounting information is explained in the research paper by Maine’s…
Q: Assume that you are the auditor of Weller, Inc and that you have been asked to explain the…
A: Full disclosure principle: Full disclosure principle ensures, all financial information relating to…
Q: IDENTIFY THE EFFECT OF THE FOLLOWING TRANSACTION TO THE RISK OF MATERIAL MISSTATEMENT TO FINANCIAL…
A: Internal audit can be done by internal employee of the company and is done on the requirement of…
Q: Madden Company applies the consistency convention. What does this mean? a. Madden Co. uses the same…
A: Consistency is the accounting principle that is to be followed by the company continuously from year…
Q: " In our opinion, the financial statements give a true and fair view of the state of the Company's…
A: An auditor is required to verify and check the accuracy of the financial records of the business. He…
Q: 13. If the financial statements provided by a company includes all information, depicted without any…
A: Net profit means the difference between the income and expenses. Financial statement means the…
Q: For which of the following events would an auditor issue a report that does not make any reference…
A: An auditor is appointed to check the accuracy of the financial statement prepared by the company.
Q: According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, an entity must…
A: Accounting policies are the measures, principles or rules which are applied by the entities so that…
Q: The accounting and auditing literature discusses several different types of accounting changes. For…
A: Given the following circumstances under which the auditor needs to add a paragraph to the audit…
Q: How can the enhancing characteristic comparability (consistency) be improved in high-quality…
A: Accounting information: Accounting information is the information reported on the financial…
Q: Which report would not be appropriate for a public accounting firm to provide on financial reporting…
A:
Q: which of the following application would an auditor apply to determine the probability of a…
A: An auditor is a person who performs the check of accounts and the financial statements to prepare a…
Q: b. According to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors an entity must…
A: Accounting Information Systems helps to perform the tasks in the job of Budget Analysis. An…
Q: Which of the following statements relating to the role ofprofessional judgment in the financial…
A: The role of professional judgment is vital in many cases. While performing duties and fulfilling the…
Q: Directions: Please select the appropriate answer on the statement below; B - If the statement is…
A: First Reporting Standard is International Accounting Standards (IAS 1): Presentation of Financial…
Q: Which of the following statements is true regarding interim reporting for companies that prepare…
A: Interim reporting is done to simply see the financial position of the company before the year ends.…
Q: The standard compilation report includes which statement or phrase?(1) A compilation is…
A: Compilation report refers to a company's financial statement that have been prepared or compiled by…
Q: Presented below are a number of facts related to Weller, Inc. Assume that no mention of these facts…
A: a. The company decided that, for the sake of conciseness, only net income should be reported on the…
Q: How can the qualitative faithful representation (reliability) characteristic be improved in…
A: Relevance refers to how useful the data is for the processes of financial decision-making. In order…
Q: Which of the following is NOT among the conditions that give rise to a demand by external users for…
A: The conditions that give rise to a demand by external users for independent audits of financial…
Which of the following statements regarding the consistency concept is not true?
Step by step
Solved in 2 steps
- The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through c.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. non-public company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error c. Change from non-GAAP to GAAP (a special case of correction of an error)When the FASB issues a new generally accepted accounting principle, it may require companies to apply the new principle prospectively, or to account for the change by the retrospective adjustment method. Required: Why do you think that the FASB requires one of two different transition methods when a company adopts a newly required accounting principle? Do you agree with the use of two alternative methods?An important task ¡n the audit of the revenue cycle is determining whether a client has appropriately recognized revenue. a. What is the five-step process that companies should use in recognizing revenue? Why might the auditor need to do additional research and consider additional criteria on revenue recognition? b. The following are situations in which the auditor will make decisions about the amount of revenue to be recognized. For each of the following scenarios, labeled (1) through (6): . Identify the key issues to address in determining whether or not revenue should he recognized. . Identify additional information the auditor may want to gather in making a decision on revenue recognition. . Based only on the information presented, develop a rationale for either the recognition or nonrecognition of revenue. 1. AOL sells software that is unique as a provider of Internet services. The software contract includes a service fee of $19.95 for up to 500 hours of Internet service each month. The minimum requirement is a one-year contract. The company proposes to immediately recognize 30% of the first-year’s contract as revenue from the sale of software and 70% as Internet services on a monthly basis as fees are collected from the customer. 2. Modis Manufacturing builds specialty packaging machinery for other manufacturers. All of the products are high end and range in sales price from $5 million to $25 million. A major customer is rebuilding one of its factories and has ordered three machines with total revenue for Modis of $45 million. The contracted date to complete the production was November, and the company met the contract dare. The customer acknowledges the contract and confirms the amount. However, because the factory is not yet complete, it has asked Modis to hold the products in the ware house as a courtesy until its building is complete. 3. Standish Stoneware has developed a new low-end line of baking products that will be sold directly to consumers and to low-end discount retailers. The company had previously sold high-end silverware products to specialty stores and has a track record of returned items for the high-end stores. The new products tend to have more defects, but the defects are not necessarily recognizable ¡n production. For example, they are more likely to crack when first used in baking. The company does not have a history of returns from these products, but because the products are new, it grants each customer the right to return the merchandise for a full refund or replacement within one year of purchase. 4. Omer Technologies is a high-growth company that sells electronic products to the custom copying business. It is an industry with high innovation, but Omer’s technology is basic. In order to achieve growth, management has empowered the sales staff to make special deals to increase sales in the fourth quarter of the year. The sales deals include a price break and an increased salesperson commission but not an extension of either the product warranty or the customer’s right to return the product. 5. Electric City is a new company that has the exclusive right to a new technology that saves municipalities a substantial amount of energy for large-scale lighting purposes (e.g., for ball fields, parking lots, and shop ping centers). The technology has been shown to be very cost effective in Europe. In order to get new customers to try the product, the sales force allows customers to try the product for up to six months to prove the amount of energy savings they will realize. The company is so confident that customers will buy the product that it allows this pilot-testing period. Revenue is recognized at the time the product is installed at the customer location, with a small provision made for potential returns. 6. Jackson Products decided to quit manufacturing a line of its products and outsourced the production. However, much of its manufacturing equipment could be used by other companies. In addition, it had over $5 million of new manufacturing equipment on order in a noncancelable deal. The company decided to become a sales representative to sell the new equipment ordered and its existing equipment. All of the sales were recorded as revenue.
- The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through e.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. nonpublic company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error e. Change from non-GAAP to GAAP (a special case of correction of an error)The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through e.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. nonpublic company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error e. Change from non-GAAP to GAAP (a special case of correction of an error) PLEASE ANWSER ONLY SECTION D & E THANK YOU!How can the enhancing characteristic comparability (consistency) be improved in high-quality accounting information? Do not simply repeat what it is, provide suggestions as to how a particular part of the enhancing characteristic could be improved. Please provide different answers and explanations than copy and pasting: “Accounting information is comparable, if -it is with consistent accounting standards and policies applied throughout each accounting period, enables users to draw insightful conclusions about the trends and performance of the company over time.”